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EXCEL - IDEA: XBRL DOCUMENT - MICROWAVE FILTER CO INC /NY/ | Financial_Report.xls |
EX-31 - EXHIBIT 31 - MICROWAVE FILTER CO INC /NY/ | exhibit31.htm |
EX-32 - EXHIBIT 32 - MICROWAVE FILTER CO INC /NY/ | exhibit32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934.
MICROWAVE FILTER COMPANY, INC.
New York | 16-0928443 | |
(State of Incorporation) | (I.R.S. Employer Identification Number) | |
6743 Kinne Street, East Syracuse, N.Y. | 13057 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports, and (2) has been subject to such filing requirements for the past 90 days.
YES __X__ NO____
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES __X__ NO____
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).
Large accelerated filer ______
Accelerated filer ______
Non-accelerated filer ______ (Do not check if smaller reporting company)
Smaller reporting company ____X____.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES ____ NO__X__
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, $.10 Par Value - 2,585,321 shares
as of February 1, 2013.
Item | Page |
Part I Financial Information | |
Item 1. Financial Statements | 3 |
Consolidated Balance Sheets (unaudited) | 3 |
Consolidated Statements of Operations (unaudited) | 4 |
Consolidated Statements of Cash Flows (unaudited) | 5 |
Notes to Consolidated Financial Statements (unaudited) | 6-7 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 8-12 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 13 |
Item 4. Controls and Procedures | 14 |
Part II Other Information | 15 |
Signatures | 16 |
<PAGE> 2
Consolidated Balance Sheets (unaudited)
December 31, 2012 | September 30, 2012 | ||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ |
|
860,596 | $ | 1,023,017 | ||||||
Accounts receivable-trade, net of | |||||||||||
allowance for doubtful accounts | |||||||||||
of $26,000 and $26,000 | 162,963 | 263,385 | |||||||||
Inventories, net of obsolete inventory reserve | |||||||||||
of $408,340 and $408,340 | 553,037 | 529,075 | |||||||||
Prepaid expenses and other current assets | 98,886 | 111,342 | |||||||||
Total current assets | 1,675,482 | 1,926,819 | |||||||||
Property, plant and equipment, net | 704,441 | 672,525 | |||||||||
Total assets | $ | 2,379,923 | $ | 2,599,344 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 114,810 | $ | 92,325 | |||||||
Customer deposits | 40,204 | 30,563 | |||||||||
Accrued payroll and related expenses | 33,418 | 51,289 | |||||||||
Accrued compensated absences | 164,667 | 172,198 | |||||||||
Other current liabilities | 30,188 | 31,308 | |||||||||
Total current liabilities | 383,287 | 377,683 | |||||||||
Total liabilities | 383,287 | 377,683 | |||||||||
Stockholders' Equity: | |||||||||||
Common stock, $.10 par value | |||||||||||
Authorized 5,000,000 shares, Issued | |||||||||||
4,324,140 shares in 2013 and 2012, | |||||||||||
Outstanding 2,585,321 shares in 2013 | |||||||||||
and 2012 | 432,414 | 432,414 | |||||||||
Additional paid-in capital | 3,248,706 | 3,248,706 | |||||||||
Retained earnings | 6,988 | 232,013 | |||||||||
Common stock in treasury, at cost | |||||||||||
1,738,819 shares in 2013 and 2012 | ( | 1,691,472 | ) | ( | 1,691,472 | ) | |||||
Total stockholders' equity | 1,996,636 | 2,221,661 | |||||||||
Total liabilities and stockholders' equity | $ | 2,379,923 | $ | 2,599,344 | |||||||
<FN>
See Accompanying Notes to Consolidated Financial Statements
<PAGE> 3
Microwave Filter Company and
Subsidiaries
Consolidated Statements of
Operations (unaudited)
For the Three Months Ended
December 31, 2012 and 2011
Three months ended | |||||||||
December 31, | |||||||||
2012 | 2011 | ||||||||
Net sales | $ | 771,244 | $ | 1,317,207 | |||||
Cost of goods sold | 568,044 | 813,995 | |||||||
Gross profit | 203,200 | 503,212 | |||||||
Selling, general and administrative expenses | 430,415 | 421,970 | |||||||
(Loss) income from operations | ( | 227,215 | ) | 81,242 | |||||
Other income (net) | 2,190 | 21,575 | |||||||
(Loss) income before income taxes | ( | 225,025 | ) | 102,817 | |||||
Provision (benefit) for income taxes | 0 | 0 | |||||||
NET (LOSS) INCOME | $ | ( | 225,025 | ) | $ | 102,817 | |||
Per share data: | |||||||||
Basic and diluted (loss) earnings per share | $ | ( | 0.09 | ) |
$
|
0.04 | |||
Shares used in computing net (loss) | |||||||||
earnings per share: | 2,585,321 | 2,586,227 |
<FN>
See Accompanying Notes to Consolidated Financial Statements
<PAGE> 4
Three months ended | |||||||||
December 31 | |||||||||
2012 | 2011 | ||||||||
Cash flows from operating activities: | |||||||||
Net (loss) income | $ | ( | 225,025 | ) | $ | 102,817 | |||
Adjustments to reconcile net (loss) income | |||||||||
to net cash provided by (used in) | |||||||||
operating activities: | |||||||||
Depreciation | 41,337 | 37,583 | |||||||
Gain on sale of fixed assets | 0 | ( | 20,000 | ) | |||||
Change in assets and liabilities: | |||||||||
Accounts receivable | 100,422 | 130,368 | |||||||
Federal and state income tax recoverable | 0 | 25,402 | |||||||
Inventories | ( | 23,962 | ) | 49,870 | |||||
Prepaid expenses and other assets | 12,456 | 12,247 | |||||||
Accounts payable and customer deposits | 32,126 | ( | 37,811 | ) | |||||
Accrued payroll, compensated absences | |||||||||
and related expenses | ( | 25,402 | ) | ( | 39,691 | ) | |||
Other current liabilities | ( | 1,120 | ) | ( | 51,899 | ) | |||
Net cash (used in) provided by | |||||||||
operating activities | ( | 89,168 | ) | 208,886 | |||||
Cash flows from investing activities: | |||||||||
Capital expenditures | ( | 73,253 | ) | ( | 189,078 | ) | |||
Proceeds from sale of fixed assets | 0 | 20,000 | |||||||
Net cash (used in) provided by | |||||||||
investing activities | ( | 73,253 | ) | ( | 169,078 | ) | |||
Net (decrease) increase in cash | |||||||||
and cash equivalents | ( | 162,421 | ) | 39,808 | |||||
Cash and cash equivalents | |||||||||
at beginning of period | 1,023,017 | 1,258,885 | |||||||
Cash and cash equivalents | |||||||||
at end of period | $ | 860,596 | $ | 1,298,693 | |||||
Supplemental Schedule of Cash Flow Information: | |||||||||
Income taxes paid | $ | 0 | $ | 15,000 |
<FN>
See Accompanying Notes to Consolidated Financial Statements
<PAGE> 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting
Policies
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Regulation
S-K. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The
operating results for the three month period ended December 31,
2012 are not necessarily indicative of the results that may be
expected for the year ended September 30, 2013. For further
information, refer to the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10K
for the year ended September 30, 2012.
Note 2. Industry Segment Data
The Company's business involves the operations of
Microwave Filter Company, Inc. (MFC) which designs, develops,
manufactures and sells electronic filters, both for radio and
microwave frequencies, to help process signal distribution and to
prevent unwanted signals from disrupting transmit or receive
operations. Markets served include cable television, television
and radio broadcast, satellite broadcast, mobile radio, commercial
communications and defense electronics.
Note 3.
Inventories
Inventories are stated at the lower of cost determined on
the first-in, first-out method or market.
Inventories net of
reserve for obsolescence consisted of the following:
December 31, 2012 |
September
30, 2012
|
Raw materials and stock parts | $ | 468,732 |
$
|
455,000 | ||||
Work-in-process | 14,170 | 13,554 | ||||||
Finished goods | 70,135 | 60,521 | ||||||
$ | 553,037 |
$
|
529,075 |
The Company's reserve for obsolescence equaled $408,340 at December 31, 2012 and September 30, 2012.
<PAGE> 6
Note 4. Income Taxes
The Company accounts for income taxes under FASB ASC 740-10. Deferred tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates which are anticipated to be in effect when these differences reverse. The deferred tax provision is the result of the net change in the deferred tax assets and liabilities. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts expected to be realized. The Company has provided a full valuation allowance against its deferred tax assets.
FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax position taken or expected to be taken on a tax return. Additionally, it provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company determined it has no uncertain tax positions and therefore no amounts are recorded.
Note 5. Legal Matters
The State of New York Workers’ Compensation Board has
commenced an action against Microwave Filter Company, Inc. to
recover for an underfunded self insured program that Microwave
Filter Company, Inc. participated in. Due to the relatively short
period of time Microwave Filter Company, Inc. participated in the
program and the limited amount of potential exposure, we do not
expect the resolution of this action will have a material adverse
effect on our financial condition, results of operations or cash
flows. The Company has accrued $12,000 for this action in other
current liabilities.
Note 6. Fair Value of Financial Instruments
The Company currently does not trade in or utilize derivative financial instruments.
Note 7. Significant Customers
Sales to one customer represented approximately 22% of
total sales for the three months ended December 31, 2012 compared
to 16% of total sales for the three months ended December 31,
2011.
Note 8. Recent Accounting Pronouncements
None applicable.
<PAGE> 7
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Microwave Filter Company, Inc. operates primarily in the United States and principally in one industry. The Company extends credit to business customers based upon ongoing credit evaluations. Microwave Filter Company, Inc. (MFC) designs, develops, manufactures and sells electronic filters, both for radio and microwave frequencies, to help process signal distribution and to prevent unwanted signals from disrupting transmit or receive operations. Markets served include cable television, television and radio broadcast, satellite broadcast, mobile radio, commercial communications and defense electronics.
Critical Accounting Policies
The Company's consolidated financial statements are based on the application of United States generally accepted accounting principles (GAAP). GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. The Company believes its use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied. Valuations based on estimates are reviewed for reasonableness and adequacy on a consistent basis throughout the Company. Primary areas where financial information of the Company is subject to the use of estimates, assumptions and the application of judgment include revenues, receivables, inventories, and taxes. Note 1 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012 describes the significant accounting policies used in preparation of the consolidated financial statements. The most significant areas involving management judgments and estimates are described below and are considered by management to be critical to understanding the financial condition and results of operations of the Company.
Revenues from product sales are recorded as the products are shipped and title and risk of loss have passed to the customer, provided that no significant vendor or post-contract support obligations remain and the collection of the related receivable is probable. Billings in advance of the Company's performance of such work are reflected as customer deposits in the accompanying consolidated balance sheet.
Allowances for doubtful accounts are based on estimates of losses related to customer receivable balances. The establishment of reserves requires the use of judgment and assumptions regarding the potential for losses on receivable balances.
The Company's inventories are stated at the lower of cost determined on the first-in, first-out method or market. The Company uses certain estimates and judgments and considers several factors including product demand and changes in technology to provide for excess and obsolescence reserves to properly value inventory.
<PAGE> 8
The Company established a warranty reserve which provides for the estimated cost of product returns based upon historical experience and any known conditions or circumstances. Our warranty obligation is affected by product that does not meet specifications and performance requirements and any related costs of addressing such matters.
The Company accounts for income taxes under FASB ASC
740-10. Deferred tax assets and liabilities are based on the
difference between the financial statement and tax basis of assets
and liabilities as measured by the enacted tax rates which are
anticipated to be in effect when these differences reverse. The
deferred tax provision is the result of the net change in the
deferred tax assets and liabilities. A valuation allowance is
established when it is necessary to reduce deferred tax assets to
amounts expected to be realized. The Company has provided a full
valuation allowance against its deferred tax assets.
<PAGE>
9
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2012 vs. THREE MONTHS ENDED DECEMBER 31, 2011.
The following table sets forth the
Company's net sales by major product group for the three months
ended December 31, 2012 and 2011.
Quarter ended | Quarter ended | |||||
Product group | Dec. 31, 2012 |
Dec. 31, 2011
|
||||
Microwave Filter (MFC): | ||||||
RF/Microwave | $ | 324,127 |
$
|
525,932 | ||
Cable TV | 183,390 | 433,447 | ||||
Satellite | 243,130 | 331,354 | ||||
Broadcast TV | 18,627 | 25,128 | ||||
Niagara Scientific (NSI): | 1,970 | 1,346 | ||||
Total | $ | 771,244 |
$
|
1,317,207 | ||
Sales backlog at December 31 | $ | 325,852 |
$
|
303,666 |
Net sales for the three months ended December 31, 2012 equaled $771,244, a decrease of $545,963 or 41.4%, when compared to net sales of $1,317,207 for the three months ended December 31, 2011. The Company has been experiencing a slowdown in quote activity and orders which management attributes to the specific decrease in the economic activity in the military/aerospace sector and related national and international markets. It is believed that the documented general slowdown in business capital expenditures has exacerbated the turn down in MFC sales activity. Many of MFC products are utilized in capital projects such as new satellite communication systems and cable plant expansions. The Company is actively sourcing complimentary products to distribute to augment sales as well as additions to our traditional product lines.
MFC’s RF/Microwave product sales decreased $201,805 or 38.4% to $324,127 for the three months ended December 31, 2012 when compared to RF/Microwave product sales of $525,932 during the same period last year. MFC’s RF/Microwave products are sold primarily to Original Equipment Manufacturers that serve the mobile radio, commercial communications and defense electronics markets. The Company continues to invest in production engineering and infrastructure development to penetrate OEM market segments as they become popular. MFC is concentrating its technical resources and product development efforts toward potential high volume customers as part of a concentrated effort to provide substantial long-term growth. Sales to one OEM customer represented approximately 22% of total sales for the quarter ended December 31, 2012 compared to approximately 16% of total sales for the quarter ended December 31, 2011.
MFC’s Cable TV product sales decreased $250,057 or 57.7% to $183,390 for the three months ended December 31, 2012 when compared to Cable TV product sales of $433,447 during the same period last year. Management has projected a decrease in demand for Cable TV products due to the shift from analog to digital television. Due to the inherent nature of digital modulation versus analog modulation, fewer filters will be required. The Company has developed filters for digital television and there will still be requirements for analog filters for limited applications in commercial and private cable systems.
<PAGE> 10
MFC’s Satellite product sales decreased $88,224 or 26.6% to $243,130 for the three months ended December 31, 2012 when compared to Satellite product sales of $331,354 during the same period last year. The decrease can be attributed to a decrease in demand for the Company’s filters which suppress strong out-of-band interference caused by military and civilian radar systems and other sources. Management attributes the decrease in sales to global economic conditions. Although economic conditions do impact sales, management expects demand for these types of filters to continue with the proliferation of earth stations world wide and increased sources of interference.
MFC’s Broadcast TV/Wireless Cable product sales decreased $6,501 or 25.9% to $18,627 for the three months ended December 31, 2011 when compared to sales of $25,128 during the same period last year. The decrease can be attributed to a decrease in demand for UHF Broadcast products which are primarily sold to system integrators for rural communities.
MFC's sales order backlog equaled $325,852 at December 31, 2012 compared to sales order backlog of $303,666 at December 31, 2011. However, backlog is not necessarily indicative of future sales. Accordingly, the Company does not believe that its backlog as of any particular date is representative of actual sales for any succeeding period. The total sales order backlog at December 31, 2012 is scheduled to ship by September 30, 2013.
Gross profit for the three months ended December 31, 2012
equaled $203,200, a decrease of $300,012 or 59.6%, when compared
to gross profit of $503,212 for the three months ended December
31, 2011. As a percentage of sales, gross profit decreased to
26.3% for the three months ended December 31, 2012 compared to
38.2% for the three months ended December 31, 2011.The decrease in
gross profit can primarily be attributed to fixed manufacturing
overhead costs and lower sales volume this year when compared to
the same period last year.
Selling, general and administrative (SGA) expenses for the three months ended December 31, 2012 equaled $430,415, an increase of $8,445 or 2.0%, when compared to SGA expenses of $421,970 for the three months ended December 31, 2011. As a percentage of sales, SGA expenses increased to 55.8% for the three months ended December 31, 2012 when compared to 32.0% for the three months ended December 31, 2011 primarily due to the lower sales volume this year when compared to the same period last year.
The Company recorded a loss from operations of $227,215
for the three months ended December 31, 2012 compared to income
from operations of $81,242 for the three months ended December 31,
2011. The decrease in operating income can primarily be attributed
to the lower sales volume this year when compared to the same
period last year.
Other income for the three months ended December 31, 2012
equaled $2,190, a decrease of $19,385, when compared to other
income of $21,575 for the three months ended December 31, 2011.
The decrease can be attributed to a $20,000 gain on the sale of a
fixed asset during the quarter ended December 31, 2011.
The provision (benefit) for income taxes equaled $0 for
the three months ended December 31, 2012 and December 31, 2011. We
have not recognized any provision for income taxes because taxable
income was reduced by bonus tax basis depreciation and offset by a
reduction in our deferred tax asset valuation reserve. Any benefit
for losses has been subject to a valuation allowance since the
realization of the deferred tax benefit is not considered more
likely than not. As required by FASB ASC 740, the Company has
determined that, at this time, it is more likely than not that the
Company will not realize all of the benefits of federal and state
deferred tax assets, and as a result, a valuation allowance was
established.
<PAGE>
11
Off-Balance Sheet Arrangements
At December 31, 2012 and 2011, the Company did not have any unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which might have been established for the purpose of facilitating off-balance sheet arrangements.
LIQUIDITY and CAPITAL RESOURCES
December 31, 2012 | September 30, 2012 | ||
Cash & cash equivalents | $860,596 | $1,023,017 | |
Working capital | $1,292,195 | $1,549,136 | |
Current ratio | 4.37 to 1 | 5.10 to 1 | |
Long-term debt | $0 | $0 |
Cash and cash equivalents increased $162,421 to $860,596 at December 31, 2012 when compared to cash and cash equivalents of $1,023,017 at September 30, 2012. The decrease was a result of $89,168 in net cash used in operating activities and $73,253 in net cash used for capital expenditures.
The net decrease in accounts receivable of $100,422 at December 31, 2012 when compared to September 30, 2012 can primarily be attributed to the lower shipments during the quarter ended December 31, 2012 when compared to the quarter ended September 30, 2012. Net sales for the quarter ended December 31, 2012 equaled $771,244 compared to net sales of $968,356 for the quarter ended September 30, 2012.
The increase in inventories of $23,962 at December 31,
2012 when compared to September 30, 2012 can be attributed to the
higher sales order backlog at December 31, 2012 when compared to
September 30, 2012, our customer's scheduled delivery dates and
the lower than expected sales volume during the quarter ended
December 31, 2012. At December 31, 2012, the Company's total
backlog of orders, which represents firm orders from customers,
equaled $325,852 compared to $272,318 at September 30, 2012.
The increase in accounts payable of $22,485 at December 31,
2012 when compared to September 30, 2012 can primarily be
attributed to the higher inventories at December 31, 2012 when
compared to September 30, 2012.
At December 31, 2012, the Company had unused
aggregate lines of credit totaling $750,000 collateralized by all
inventory, equipment and accounts receivable.
Management believes that its working capital requirements
for the forseeable future will be met by its existing cash
balances, future cash flows from operations and its current credit
arrangements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
In an effort to provide investors a balanced view of the Company's current condition and future growth opportunities, this Quarterly Report on Form 10-Q includes comments by the Company's management about future performance. These statements which are not historical information are "forward-looking statements" pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These, and other forward-looking statements, are subject to business and economic risks and uncertainties that could cause actual results to differ materially from those discussed. These risks and uncertainties include, but are not limited to: risks associated with demand for and market acceptance of existing and newly developed products as to which the Company has made significant investments; general economic and industry conditions; slower than anticipated penetration into the satellite communications, mobile radio and commercial and defense electronics markets; competitive products and pricing pressures; increased pricing pressure from our customers; risks relating to governmental regulatory actions in broadcast, communications and defense programs; as well as other risks and uncertainties, including but not limited to those detailed from time to time in the Company's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. You are encouraged to review Microwave Filter Company’s 2012 Annual Report and Form 10-K for the fiscal year ended September 30, 2012 and other Securities and Exchange Commission filings. Forward looking statements may be made directly in this document or “incorporated by reference” from other documents. You can find many of these statements by looking for words like “believes,” “expects,” “anticipates,” “estimates,” or similar expressions.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no significant change in our exposures to market risk during the three months ended December 31, 2012. For a detailed discussion of market risk, see our Annual Report on Form 10-K for the fiscal year ended September 30, 2012, Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk.
<PAGE> 13
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
This Quarterly Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm.
<PAGE> 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The State of New York Workers’ Compensation Board has commenced an action
against Microwave Filter Company, Inc. to recover for an underfunded self
insured program that Microwave Filter Company, Inc. participated in. Due
to the relatively short period of time Microwave Filter Company, Inc.
participated in the program and the limited amount of potential exposure,
we do not expect the resolution of this action will have a material adverse
effect on our financial condition, results of operations or cash flows. The
Company has accrued $12,000 for this action in other current liabilities.
Item 1A. Risk Factors
Not applicable.
Item 2. Changes in Securities
None during this reporting period.
Item 3. Defaults Upon Senior Securities
The Company has no senior securities.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
a. Exhibits
31.1 Section 13a-14(a)/15d-14(a) Certification of Carl F. Fahrenkrug
31.2 Section 13a-14(a)/15d-14(a) Certification of Richard L. Jones
32.1 Section 1350 Certification of Carl F. Fahrenkrug
32.2 Section 1350 Certification of Richard L. Jones
<PAGE> 15
Pursuant to the
requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
MICROWAVE FILTER COMPANY, INC.
February 14, 2013
Carl F. Fahrenkrug
(Date)
--------------------------
Carl F. Fahrenkrug
Chief Executive Officer
February 14, 2013
Richard L. Jones
(Date)
--------------------------
Richard L. Jones
Chief Financial Officer
<PAGE>
16